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Welcome to the May 2012 issue of The Navigator. In this edition, we share our REDe service describing some great solutions for anyone looking to sell online, look at some of the solutions that Aramex has for the Oil and Gas sector, outline some ways to save energy in the workplace, and we share the latest custom updates from Qatar.

 

 

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On Track: 20/20 Vision - Logistics at the end of 2020

 Aramex looks at the decade ahead and what it will hold for the logistics industry. 

 

If the first ten years of the third millennium have been the decade of debt-powered growth, then the second might well be dominated by logistics. A recent study on international trade by McKinsey & Company predicted that by the year 2020 around 80 per cent of the goods in the world will be “manufactured in a country different from where they are consumed”. The current figure is 20 per cent, which means a potential four-fold growth in shipping volumes in just ten years. Logistics is the sector on which the global economy will increasingly rely. It also means that logistics will no longer be a mere facilitator of economic growth, but will increasingly drive the direction of economic development.

On one side of the equation, the developing world, spearheaded by China and India, will continue to streak ahead with export-driven growth, shifting the balance of global trade Eastwards, with the need for capacity increases and infrastructure improvements. One the other side, more developed countries will be seeking greater technological advances, more process integration and, ultimately, less environmentally-harmful means of getting products to their desired destinations.
 
The goals for the logistics industry are clear: deliver more, deliver further, deliver faster and, ultimately, deliver cleaner. There is also the other challenge facing logistics providers, to deliver better – when required, wherever it is required, with complete end-to-end management.  Iyad Kamal, Aramex’s Chief Operations Officer, sees these challenges as essentially four separate elements. Firstly, the eastward shift in the focus of the logistics industry’s principal operations, not simply because of their vast exports but because of their increasing domestic consumption due to, as he says, “continuous expansion, rising GDP,and increased household expenditure”.
 
Secondly, as developing world seeks more cost effective solutions to facilitate international shipments, third-party logistics will come to the fore. Logistics expert Ronald Ballou wrote in a European Business Review article, stating that “supply chain strategy is increasingly viewed as a source for contributing to the revenues of the firm”. This will require increased collaboration between the logistics operation and the company, with the outsource relationship being seen less as customer-supplier relationship and more of a partnership.
 
The third element to affect logistics in the next decade is the ongoing advance of technology. “As outsourcing creates greater integration between clients and logistics companies, systems will need to offer seamless transactions,” says Iyad Kamal, “especially as online, mobile, and other auxiliary technologies converge.” In practice, this will mean logistics providers will have to offer an IT infrastructure that offers their customers instant access to information. Also, GPS will take the forefront in tracking, reducing order cycle time.
 
The fourth development will be in green solutions. Not only will customers be making more informed choices based on sustainability, but carbon reduction is likely to a legal requirement in the next decade. In logistics this will mean use of hybrid vehicles; as Aramex has done with the introduction of the Toyota Prius cars in Amman, Jordan. It will also mean better use of public transport, such as the growing number of Aramex’s foot couriers in Dubai, who are taking advantage of the new metro system.
 
Most importantly of all, though, the logistics industry won’t simply at the receiving end of business development in the next ten years, it will be in a prime position to drive it. Logistics can dramatically impact the global economy, remaining at the forefront of technological advancement and sustainable practices.
 
How will the logistics and transportation industry look like in 2020? Tell us what you think. (Please press "Add Comment" once, comments are moderated.)

 

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